The Today Show recently featured a segment on entrepreneurship -- specifically, how many individuals are beginning to start businesses in response to a fragile economy and job market. As unemployment rises (currently up to 5.5%), many driven individuals find themselves without jobs and are forced to find creative solutions to their economic pressures.

Presented in the clip below is the story of Tracy Huges, founder of The Rum Cake Fairy Dessert Company. Tracy started the venture after being laid off from her marketing job.

The segment provides much highly useful information to new entrepreneurs, including the importance of having a good credit history, building trusting relationships with potential investors and creditors, and most importantly, carefully constructing a formal business plan. Business plans are a crucial step in the funding process, and are required documentation before pursuing capital from an SBA affiliate or micro lending institutions. While the segment places less focus on angel investors or venture capitalists, it’s important to note that such documentation is also a prerequisite for seeking equity funding as well.

Special attention is given to the personal loan management company Virgin Money (www.virginmoneyus.com). Such companies allow their users to formally structure loans between friends and family, which can be a fantastic way to manage early stage debt.

 

Imagine reaching all of the goals you’ve set out to achieve within the confines of a four-day work week. Sounds pretty nice, doesn’t it? Now imagine hiring significantly fewer employees than your competitors and developing products that are dramatically scaled back in comparison to what those same competitors are building down the street….and then watching your venture reach milestone after promising milestone! That’s a reality for Jason Fried and David Heinemeier Hansson, the entrepreneurs behind the company 37Signals.

With an iconoclastic view of what is needed to succeed in the fast-paced, whiz-bang world of web-based product development, 37Signals takes the old mantra “less is more” to a new level. In a recent interview with Bill Taylor, the founders shared their view that “less is less- because more is not better!” Their approach, which focuses on solving only the problem at hand by avoiding superfluous add-ons and unnecessary tweaks has not only resonated with their customers, but has created a large number of 37Signals evangelists.

Jason and David, while they are best known for their project-management software Basecamp and contact-management software Highrise, have also authored a book on the subject of success through simplicity, titled Getting Real. Inside, they tell entrepreneurs to add only the ingredients of the utmost importance when it comes to staffing, operations, and product development. They also passionately implore business owners to resist the urge to scale up, just because the opportunity to do so presents itself.

Though 37Signals is known for its frugality and prowess in the world of programming, there are strategic lessons for businesses of all types here; whether it’s scaling back the development of unessential functionality for your Web 2.0 company or modifying the operations at your coffee shop so that you don’t need to hire that extra barista. What can you do to simplify your business?

As every entrepreneur knows, a great business plan is essential for effectively launching a business.  As the business grows, an effective strategic plan is required to successfully reach the business’s full potential.

But what about planning your exit strategy? 

Far too many business owners do not realize that careful strategic planning to sell your business is just as important as planning to launch and grow your business.

In addition to an independent lifestyle and personal fulfillment, a successful exit is the primary motivator for business ownership and entrepreneurship. 

(Not to mention that a successful exit tends to improve one’s lifestyle and personal fulfillment...)

Because acquisition is the most common exit for an entrepreneur / business owner, here are some tips to better prepare you to sell your business.

Don’t Wait Too Long To Sell

Many business owners wait until the last minute to try and sell their business. They wait until the business is stagnating, or they are exhausted with running the business. In fact, the best time to sell is when business is booming.

But Take Your Time – Don’t Be in Too Much of a Hurry

If you are in too much of a hurry to sell, you will probably leave a lot of money on the table. Buyers – especially sophisticated larger corporations – will likely sense your urgency and will take advantage of it in the negotiation period.

Start the Process Early

It’s a good idea to begin preparing 2-4 years BEFORE the sale. It’s much more expensive and time-consuming to rush and prepare all of the necessary financial and other information in a few months than it is to consistently record and compile records over a period of years. This record-keeping is also important for your business’s growth, since it provides more perspective on your company’s performance.

Get Your House in Order

Make sure that you have been keeping accurate financial records and that your assets are ready for sale.  This includes both tangible assets such as equipment and inventory, as well as intangible assets such as contracts, leases, patents, trademarks, etc.  Make sure that everything is assignable to the buyer and be prepared for extensive due diligence.

Try to See It From the Buyer’s Point of View

A buyer’s motivations are often different than the typical business owner’s. While the entrepreneurial business owner may get excited about innovation and creative strategies, the buyer cares much more about the potential for stable revenue streams and growth potential.  Take time to understand your potential buyer’s point of view, interests, and motivations.

Make Yourself Less Central to the Business’s Success

The buyer wants to buy a business – not you or your job.  From the buyer’s perspective, it’s better if the current owner is not important to the success of the business.  Therefore, in planning for the sale of your business, you should begin training your management team to take over critical business functions.  If all of the key decisions revolve around you (the owner), then the value of the company will be limited without the owner – and therefore, the business is less attractive to a buyer.

Meanwhile, Keep Focused on Running (and Growing) Your Business

When starting the sales process, you must keep a laser-sharp focus on your business’s operations.  It’s important that you do not get too wrapped up in either the sales process or in the romance of any particular sale offer.  As difficult as this is, it’s best to act as if any deal can fall through, even if you are in the final negotiation period, because any deal can come unraveled at the last moment.  Keep your focus on growing your business until the check has cleared and is in the bank. 

In addition, you should do your best to keep the sales process confidential so that you do not endanger relationships with any key clients, employees, or partners whose departure could threaten a transaction or the operations of your business.

Get Professional Assistance

If you are a business owner seeking to sell your business, you can benefit from outside advice and assistance.  As the old saying goes, “The attorney who represents himself has a fool for a client.”  The same applies for a business owner selling without an advisor.  Your advisor will provide you with guidance regarding valuation, due diligence, and the marketing of your business opportunity.  Without a competent advisor, you decrease your chances of selling your business at its maximum price.

Even if a Deal Comes, Be Prepared to Say No

If you have invested a lot of time and energy into the search, negotiation, and due diligence phases, you may be reluctant to reject any deal that comes across the table. However, just because you have a deal in front of you, you do not have to take it.  If the price is not attractive or if the deal is not right for another reason – and it cannot be mended – you may be wise to walk away and consider the next opportunity.

Sometimes, during the process of preparing their business for sale, business owners will find themselves at the helm of a much more profitable, attractive business.  If you have a profitable business, keep in mind that you have other options at your disposable.  In addition to selling your business, you can continue to grow organically, raise growth capital, and/or explore strategic partnerships. 

It’s important to continually evaluate your options throughout all phases of business growth to ensure that you are making the best decisions for the long term.

 

---

About Growthink

Founded in 1999, Growthink is a leading middle market investment bank.  Our professional investment bankers have assisted clients in raising more than $1 billion in growth financing, as well as advising on mergers and acquisitions transactions.

 

Need assistance with your business exit strategy? 

• Consult a professional business plan consultant.

 

Looking to sell your business?

• We have considerable experience advising middle market business owners on the sale of their businesses. Contact Growthink's investment bankers today.

 

For the new entrepreneur, there are few factors with a higher correlation to unbridled success or devastating failure than the ability to raise capital. In an economy of questionable strength, dreaming up a shiny new venture of revolutionary proportions is no longer the battle; the new challenge is finding the minds that will fuel that venture with dollars. In New York, one business-woman named Yao-Hui Huang has borrowed from popular culture to devise a sensational way to bring new ventures face-to-face with potential investors.

Admittedly, the project known as the Gauntlet is far from the first organized attempt to bring entrepreneurs and investors together. How this differs, is that it emulates the strategies of the highly successful TV show: American Idol. Similar to the show, which employs a panel of industry experts, the Gauntlet has a panel of judges with expertise in law, accounting, finance, technology, and investment.

Contestants who make it through the rigorous application process are chosen in groups of three to present at the monthly gathering. In front of the panel and an audience of over 100, entrepreneurs get seven minutes to pitch their venture along the areas of: problem, solution, market, industry, overview, operations, and financials. Presenters are then inundated with feedback from the audience and panel, and a select few go on to receive venture capital.

It is nice to see a refreshing approach to matching the right investors with the right entrepreneurs. Also, this structure provides the ability to share a business model with peers and experts while allowing the entrepreneur an attractive opportunity to refine, revisit, and hopefully improve areas of their business strategy.

Would your business plan be ready to go through the Gauntlet?

Seth Godin’s Purple Cow has a relatively simple premise that new products need to be truly remarkable in order to succeed. His book is packed with great examples and insights.

In this video, Godin starts off by explaining the failure of the sliced bread machine and explaining that ideas that spread, win. Worth watching:

Many musicians are happy just creating music and enjoying the lifestyle that being a famous musician provides. However, a lot of pop, rap & rock stars have interests beyond music, including a passion for entrepreneurship.

Here is a list of the 25 most impressive musician entrepreneurs. While it’s tough to compare people in different fields, here are some of the factors that weighed heavily for these rankings:

• Success.

• Diversity. When it comes to musicians, there are certain ventures that are more popular than others (as evidenced by the number of clothing lines you’ll see below). Bonus points for anyone willing to try something unique.

• The artist’s DIY attitude. In other words: How personally involved are they in these entrepreneurial ventures? Do they take an active role, or do they just lend out their name and let others do the dirty work?

Here we go…

25) Benji & Joel Madden

The brothers of Good Charlotte, who once sang negatively about the “Lifestyles of the Rich & Famous,” made themselves both rich and famous with their music and their clothing line. The Maddens started MADE Clothing in 2005, and eventually renamed the company DCMA Collection after expanding into hats, belts and other accessories. MADE/DCMA has become very popular with celebrities such as Paris Hilton, as well as artists and fans within the pop/punk music genre.

 

 

 

 

24) Kanye West

Kanye dropped out of art school and made a name for himself in the music business, first as a producer and then as a solo artist. Since achieving success, Kanye has set up his own record label (GOOD Music) and written a book (Thank You and You’re Welcome! - due in 2008). He also plans to open a café in Washington D.C., with some help from his father.

 

 

 

 

 

23) Pharrell

Pharrell Williams made a name for himself producing, but he also released hits with his group N.E.R.D. Known for his fashion as well as his music, Pharrell started both a clothing line (“Billionaire Boys Club”) and a footwear line (“Ice Cream”). These ventures uniquely fuse rock, hip hop and skateboarding culture.

 

 

 

 

 

22) Alicia Keys

In 2006, a 24-year old Alicia Keys started her own production company and signed a deal to produce a sitcom for the CW Network. Keys, who has been described as a “workaholic” and an “independent person,” also acts as the spokesperson for various charities. She has acted in a number of TV shows and movies. Keys also co-founded KrucialKeys Enterprises, a musical production and songwriting company.

 

 

 

 

21) Moby

In 2002, electronic artist Moby and his girlfriend opened a café called TeaNY in Manhattan’s Lower East Side. The vegetarian/vegan tea café was designed to be a hangout for New Yorkers, but eventually grew into a major attraction. TeaNY features about 100 different types of tea, all of which can be purchased online. The company expanded by partnering with White Knight Beverages and creating a line of bottled iced tea.

A natural businessperson, Moby is known for his progressive attitude toward licensing songs. He was instrumental in lessening the “sell-out” stigma once frequently attached to artists who licensed songs to commercials.

 

 

20) Dexter Holland

Dexter Holland, front man of The Offspring, started his own independent punk label in 1994, right around the same time The Offspring was experiencing mainstream success. Along with co-founder and Offspring bassist Greg Kriegel, Holland has run Nitro Records ever since, introducing new punk artists to the mainstream while allowing them to maintain artistic integrity. Holland also found time to create his own brand of hot sauce (called “Gringo Bandito”), which can be purchased online or in grocery stores across California.

 

 

 

19) Gene Simmons

Since the inception of KISS several decades ago, Gene Simmons has sold the KISS name to every product imaginable, from KISS checkers to KISS bowling balls to the KISS Kasket (yes, that is a real product). In fact, Simmons has approximately 2,500 licensing deals in total. When not making money from licensing, Simmons has kept busy with a variety of entrepreneurial ventures, including his own record label, TV shows and autobiographies.

 

 

 

 

18) Bono

In addition to fronting U2 for the past three decades and working as a political activist, Bono has undertaken a number of business ventures. In 1992, Bono and band mate Edge purchased The Clarence, a two-star Dublin hotel. They did a complete renovation and turned The Clarence into a luxury 5-star hotel. In the early 2000s, Bono and a handful of elite businessmen founded Elevation Partners, a private equity firm focusing on intellectual property. To date Elevation has invested over a billion dollars in various media projects.

Bono also unveiled his own clothing line in 2005. The line of blazers, t-shirts and jeans was created by Bono, his wife Ali, and designer Rogan. The clothing line was designed to provide jobs and money for impoverished citizens of Africa.

 

17) Gwen Stefani

In 2004, Gwen Stefani founded L.A.M.B., a fashion line heavily influenced by Asian and Central American culture. The L.A.M.B. name comes from Stefani’s first solo album, and Stefani is involved with all facets of production. In 2005, Stefani branched out into accessories. She also created her own line of cell phones and cameras. Her latest venture is a fragrance line, launched in 2007.

 

 

 

 

 

16) Queen Latifah

Dana Owens, known to most as Queen Latifah, was a trendsetter for rappers and musicians-turned-actors. Owens is President of Flavor Unit Productions, and has production credits for a bunch of films and TV shows. She has hosted her own talk show, starred in a sitcom, acted in several movies, and written an autobiography. Owens is also a spokesperson for Cover Girl cosmetics, where she created her own make-up line for the company.

 

 

 

 

 

15) David Bowie

David Bowie was ahead of his time as a musician, and when he became an entrepreneur, that didn’t change. Bowie started a technology company and an Internet service provider in the late 90s, making him one of the first musicians to fully realize the power of the web. In the early 2000s, Bowie started his own record company to free himself of the corporate structure of his previous label. He also runs a website where art students can sell their work without the burdens of a traditional art gallery (www.bowieart.com). These days, Bowie uses his website (www.davidbowie.com) as a means of promoting the artists on his label.

 

 

 

14) Beyoncé

Even when she was part of Destiny’s Child, Beyoncé was known for her style, so it’s no surprise that she formed her own fashion line, House of Deréon, in 2004. Beyoncé made House of Deréon into a popular worldwide brand by promoting it on “Oprah” and “The Tyra Banks Show.” Beyoncé even snuck a plug into one of her songs, singing “Shake your derriere in them Deréons” on the track “Get Me Bodied.”

In addition to being an entrepreneur, Beyoncé also makes a ton of money from sponsorships with companies such as Pepsi, L’Oreal, Emporio Armani, Samsung, American Express and DirecTV. Her net worth is currently in the neighborhood of $300 million.

 

 

13) Victoria Beckham

Even though Victoria Beckham was in one of the most successful pop groups ever, she’s just as well known for being a style icon. In 2004, Beckham designed a line of jeans for Rock & Republic, and in 2006 she launched her own fashion line called dvb Style. The dvb brand specializes in jeans and eyewear, but Beckham has also launched a fragrance line and designed handbags and jewelry for a Japanese company. Beckham doesn’t just lend her name to these products; she is involved with all stages of production. In addition to her fashion achievements, Beckham has written two books and signed a reality TV deal. For all of these accomplishments, Beckham was named Glamour Magazine’s “Entrepreneur of the Year” in 2007.

 

 

12) Sammy Hagar

While many fans preferred David Lee Roth as singer, Sammy Hagar is definitely the Van Halen front man you’d want running your company. In the 80s, Hagar opened the resort Cabo Wabo in Cabo San Lucas, Mexico. The resort has become such a hit that Hagar opened a second location in Lake Tahoe, UT, but what’s more impressive is the brand of tequila it spawned. Hagar created Cabo Wabo tequila in 1996 as the “house” liquor, but has since taken the brand worldwide. In 2006, more than 140,000 cases of Cabo Wabo tequila were sold. In 2007, Hagar sold 80% of the Cabo Wabo tequila brand to beverage company Gruppo Campari for $80 million.

 

 

 

11) Ludacris

Ludacris (a.k.a. Chris Bridges) has a business degree from Georgia State, and while he may have chose to pursue music, that degree definitely came in handy. When Ludacris couldn’t get a record deal, he stopped trying to impress execs and started his own label instead. For the past decade, Luda has transformed Disturbing tha Peace Records from an avenue for releasing his own records into a major company, signing hit artists such as Chingy and Bobby Valentino. And while many rappers go into acting, Ludacris has done it better than most, appearing to critical acclaim in Crash, 2006’s Best Picture. Ludacris will also be opening a $2.7 million upscale restaurant in Atlanta in April, and is considering additional restaurants as well.

 

 

10) Madonna

In the late 1970s, Madonna dropped out of college and moved to New York with just a few dollars. Today she is worth approximately $325 million, mostly because of her business savvy. Madonna is known for staying ahead of trends, musically and in her business ventures. Her 1992 book, Sex, was both extremely controversial and extremely popular. She has started an entertainment company, a publishing company, and a clothing line. She is also an avid investor. One business professor even called Madonna “America’s smartest businesswoman.”

 

 

 

9) Dr. Dre

In 1995, unhappy with the direction of his record label, Dre formed his own label, Aftermath Entertainment. Aftermath hit it big by signing popular artists such as Eminem and 50 Cent, and throughout the 2000s Dre has consistently been one of the top earners in all of music. Dre, a long-time director of music videos, has announced that he will begin producing films for Crucial Films in the near future. He also recently signed a partnership to “develop and market” both alcoholic and non-alcoholic beverages for Drinks America. Dre is well-known for being a perfectionist, a trait that has both earned him respect and caused difficulties between him and other artists.

 

 

 

8) Justin Timberlake

Justin Timberlake has been omnipresent in the music business since 1998, so it’s amazing that he has time to branch out into other areas. Timberlake has opened a handful of restaurants, including the new Southern Hospitality in New York City (seen in Timberlake’s Super Bowl commercial). He also, along with a lifelong friend, launched a clothing line sold through Bloomingdales. Recently Timberlake started his own record label, Tennman Records. In a very forward-thinking maneuver, he signed YouTube sensation Esmee Denters as the label’s first artist.

 

 

 

7) Jennifer Lopez

After succeeding in music, J.Lo launched a clothing line in 2003, and made everything from jeans to lingerie to gloves. Lopez also launched various accessory lines, a jewelry line, 9 fragrance lines, and even a children’s clothing line, resulting in a net worth of over $250 million. In addition to her fashion businesses, Lopez owns a production company called Nuyorican Productions. The company has produced both reality shows and feature films. In 2002, Lopez opened a restaurant called Madre’s in Pasadena, CA. She helped design the interior, and many of the dishes are inspired by her grandmother’s cooking.

 

 

 

6) Jermaine Dupri

As a teenager, Jermaine Dupri became a successful producer when he discovered the 12-year old rap sensations Kriss Kross. He went on to produce hits by TLC, Janet Jackson and Mariah Carey, among others. Along the way, Dupri founded So So Def Recordings, and became one of the most respected figures in music. He started So So Def Sports, a sports management company. He is owner and partner of 3 Vodka Distilling, makers of high-end alcohol. In 2007, he released an autobiography. And on top of these entrepreneurial ventures, Dupri was appointed President of Island Records’ urban division in 2007.

 

 

 

5) Pete Wentz

Wentz, the bassist for Fall Out Boy and idol to teenage girls worldwide, is also an active entrepreneur. Wentz runs his own record label, Decaydence Records, which is currently thriving despite the declining state of the music industry. Wentz also started a clothing company called Clandestine Industries in 2004. His clothes are extremely popular amongst fans of the emo/punk genre.

Wentz is also an author, having published a fictional book titled The Boy With The Thorn In His Side. Last year, Wentz opened a bar in Manhattan called Angels & Kings. He plans on putting out another book and opening a hair salon in the near future.

 

 

 

4) Master P

Percy Miller, a.k.a. Master P, started No Limit Records in 1990 with $10,000 that he received from a wrongful death lawsuit after his grandfather passed away. By the late 90s, Miller was a multi-millionaire and No Limits was worth an estimated $661 million. Among the company’s holding were a clothing line, a film company, a sports management agency, and a real estate company. Master P even tried to play in the NBA, nearly making the Charlotte Hornets’ roster in 1998.

Master P’s career has cooled down considerably since the 90s, and No Limit was reorganized in 2004, but Miller is still involved in many entrepreneurial ventures. He is currently developing a video game, and he also releases music via a new label, Guttar Music. Miller co-founded Guttar Music along with his son Romeo, who is a freshman at USC.

 

 

3) 50 Cent

Curtis Jackson is one of the most popular and best-selling rappers of the decade, but he’s actually made most of his money outside of music. Jackson developed the G-Unit Clothing Company in 2003 and signed a deal with Reebok to distribute his G-Unit sneaker line. Along with the beverage company Glacéau, Jackson created and marketed a Vitamin Water flavor called “Formula 50.” When Glacéau was purchased by Coca-Cola in 2007, Jackson reportedly made over $100 million after taxes as part of the deal. Like so many others on this list, 50 has his own record label, G-Unit Records. He is also an actor and author.

 

 

 

2) Jay-Z

Shawn Carter co-founded Roc-A-Fella Records in 1996, and over the past 12 years he has grown the fledgling label into a massive empire using both his musical abilities and his business savvy. Roc-A-Fella now features a production company and a Spanish music label, and the company also owns U.S. distribution rights for the high-end Scottish vodka Armadale. Jay-Z and Roc-A-Fella famously created Roc-A-Wear, an incredibly popular clothing line that was sold last year for $204 million dollars.

In 2004, Jay-Z sold his stake in Roc-A-Fella and became President and CEO of Def Jam Recordings, where he remained until a few months ago. Jay is also part owner of the New Jersey Nets, and the 40/40 Club in New York City. Currently worth over $500 million, Jay-Z shows no signs of slowing down.

 

1) Diddy

There’s nothing Sean Combs can’t do. Diddy worked his way from humble beginnings into Howard University’s business school. There, he preferred to spend his time working and making money rather than studying. By age 21, Diddy was developing talent at Uptown Records in New York, while also working as a back-up dancer in music videos. In 1993 he left Uptown to form Bad Boy Records, which became home to many big-time artists, most notably Notorious B.I.G.

Bad Boy is now an empire worth hundreds of millions, and Diddy has set up many other ventures. His Sean John clothing line is extremely popular and worth millions. His Unforgivable fragrance, launched in 2006, sells for roughly $70 a bottle. He serves as CEO of Blue Flame Marketing and Advertising. Last year, Diddy signed a deal with Diageo PLC to promote Ciroc Vodka. He’ll have a major role in the vodka’s branding and marketing, and he’ll split profits 50-50. Diddy also created (and appears on) the TV series “Making Da Band.” In 2004 he acted in the Broadway play “A Raisin in the Sun,” and he recently starred in the Made-For-TV version of the play. Diddy also owns restaurants in New York and Atlanta (named “Justin’s,” after his son). And if that’s not enough, Diddy holds the honor of having designed the Dallas Mavericks’ green alternate jerseys. All of this amounts to a net worth of roughly $350 million.

While music critics might tell you Diddy can’t rap, few people will deny that he’s a truly amazing businessperson. As Diddy himself once said, “Don’t worry if I write rhymes… I write checks.”

Let us know what you think. Who is the best musician entrepreneur, and what other musicians deserve to be on the list?

There is no simple formula for creating a successful business. Luckily, there is an easy way to improve your chances.

And that’s by listening to the wisdom of those who have done it already.

With that in mind, here are 25 quotes from famous entrepreneurs…

INSPIRATION

1) "If you can dream it, you can do it."

-Walt Disney, founder of The Walt Disney Company


2) "Business opportunities are like buses, there's always another one coming."

-Richard Branson, founder of Virgin Enterprises


3) “Capital isn't that important in business. Experience isn't that important. You can get both of these things. What is important is ideas.”

-Harvey Firestone, founder of Firestone Tire & Rubber Co.


4) “Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma - which is living with the results of other people’s thinking. Don’t let the noise of other’s opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.”

-Steve Jobs, co-founder of Apple and Pixar


5) “Find your passion… then it is no longer work!”

-L.A. Reid, co-founder of LaFace Records

TAKING INITIATIVE

6) “I had to make my own living and my own opportunity! But I made it! Don't sit down and wait for the opportunities to come. Get up and make them!"

-Madam C.J. Walker, creator of beauty products and the first female self-made millionaire


7) “The critical ingredient is getting off your butt and doing something. It’s as simple as that. A lot of people have ideas, but there are few who decide to do something about them now. Not tomorrow. Not next week. But today. The true entrepreneur is a doer, not a dreamer.”

-Nolan Bushnell, founder of Atari & Chuck E. Cheese’s


8) “The key is to just get on the bike, and the key to getting on the bike… is to stop thinking about ‘there are a bunch of reasons I might fall off’ and just hop on and peddle the damned thing. You can pick up a map, a tire pump, and better footwear along the way.”

-Dick Costolo, founder of Feedburner.com


9) “The important thing is not being afraid to take a chance. Remember, the greatest failure is to not try.”

-Debbi Fields, founder of Mrs. Fields Cookies

HARD WORK vs. LUCK

10) “Genius is 1% inspiration, and 99% perspiration.”

-Thomas Edison, founder of General Electric (GE)


11) “I made a resolve then that I was going to amount to something if I could. And no hours, nor amount of labor, nor amount of money would deter me from giving the best that there was in me. And I have done that ever since, and I win by it. I know.”

-Colonel Sanders, founder of KFC


12) “Nobody talks of entrepreneurship as survival, but that's exactly what it is.”

-Anita Roddick, founder of The Body Shop


13) “Don’t ever let anyone tell you that something is too competitive. Once you subtract the people who don’t work very hard, or the people who aren’t as good as you, your competition shrinks dramatically.”

-Maggie Mason, founder of Mighty Goods


14) “Life is really simple as far as I’m concerned. There is no luck, you work hard and study things intently. If you do that for long and hard enough you’re successful.”

-Jason Calacanis, founder of Weblogs, Inc.

PERSEVERANCE

15) "When you reach an obstacle, turn it into an opportunity. You have the choice. You can overcome and be a winner, or you can allow it to overcome you and be a loser. The choice is yours and yours alone. Refuse to throw in the towel. Go that extra mile that failures refuse to travel. It is far better to be exhausted from success than to be rested from failure."

-Mary Kay Ash, founder of Mary Kay Cosmetics


16) “It doesn’t matter how many times you fail. It doesn’t matter how many times you almost get it right. No one is going to know or care about your failures, and neither should you. All you have to do is learn from them and those around you because all that matters in business is that you get it right once. Then everyone can tell you how lucky you are.”

-Mark Cuban, owner of the Dallas Mavericks, co-founder of Broadcast.com, founder of HDNet

GUIDING PRINICIPLES

17) “Entrepreneurs are risk takers, willing to roll the dice with their money or reputation on the line in support of an idea or enterprise. They willingly assume responsibility for the success or failure of a venture and are answerable for all its facets.”

-Victor Kiam, owner of Remington Products


18) “The best reason to start an organization is to make meaning; to create a product or service to make the world a better place.”

-Guy Kawasaki, venture capitalist, CEO of Garage Technology Ventures


19) “A friendship founded on business is a good deal better than a business founded on friendship.”

-John D. Rockefeller, founder of Standard Oil


20) “An entrepreneur tends to bite off a little more than he can chew hoping he’ll quickly learn how to chew it.”

-Roy Ash, co-founder of Litton Industries


21) “I've been blessed to find people who are smarter than I am, and they help me to execute the vision I have.”

-Russell Simmons, founder of Def Jam


22) “One of the unique things we small companies have over the big guys is the ability to establish personal relationships. Big companies really can't do that. You read about effective organizations, learning organizations, lean and mean organizations, but small companies can be virtuous. We as small companies can have virtue because we as small companies are basically the embodiment of one or two people, and people can have virtue, while organizations really can't."

-Jim Koch, founder of Boston Beer Company


23) “Experience taught me a few things. One is to listen to your gut, no matter how good something sounds on paper. The second is that you're generally better off sticking with what you know. And the third is that sometimes your best investments are the ones you don't make.”

-Donald Trump, real estate developer


24) “High expectations are the key to everything.”

-Sam Walton, founder of Wal-Mart

SATISFACTION

25) “I find that when you have a real interest in life and a curious life, that sleep is not the most important thing.”

-Martha Stewart, founder of Omnimedia

 

 

---

About Growthink

Since 1999, Growthink's professional business plan consultants have assisted more than 1,500 clients in launching and growing their businesses, and raising more than $1 billion in growth financing.

• Need help with your business plan? 
• Looking to raise venture capital?

 

Speak with a business plan writer today!

 

There have been many articles written on the subject of why businesses fail, and most of them point to the same reasons, such as:

-Inadequate funding
-Bad location
-Lack of a well thought-out business plan
-Poor execution
-Bad management
-Expanding too quickly
-Insufficient marketing or promotion
-Inability to adapt to a changing marketplace
-Failure to keep overhead costs low
-Underestimating competitors

These reasons are widespread and no doubt cause many businesses to fail. However, the reason for a company’s failure is not always something so obvious. Here are 6 lesser-known reasons why a business might fail.

Why do these reasons remain untold? Simple. Most of the time, the business owner doesn’t realize that these reasons are what caused their failure, and consultants generally don’t ask the kinds of questions that would identify them.

 

1) Focusing on Short-Term Profits Rather than Building Long-Term Value

It’s important to be profitable, but NOT when short-term profits come at the expense of the long-term value of the business and the lifetime value of the customer.

Here’s a real-life example: In the late 1990s, there was a franchise of a national smoothie shop located in West Los Angeles, CA. At this store, smoothies sold for about $4. They cost only around $1 to make, resulting in a solid profit. However, certain ingredients, like mangoes and berries, cost more than the other ingredients, such as juice and frozen yogurt. Since juice and frozen yogurt were cheap, the franchisee put more of these ingredients in their smoothies and less of the expensive ingredients. By doing this, their profit margin per smoothie grew by approximately 20 cents, which seemed great… on paper. Unfortunately for the store, customers weren’t satisfied with the taste of the lower cost smoothies, people stopped going there, and the store eventually went out of business.

As you can see here, it’s important to consider the lifetime value of a customer. Repeat business is way more valuable than short-term profits. Saving 20 cents on a smoothie today will cost you big in the long run.

(Another great example of this concept is Google giving preference to relevant ads in order to improve the user experience, even though there are less relevant advertisers willing to pay a higher price per click.)

 

2) Ego Business vs. Business Opportunity

The foundation of a good business is a good business opportunity. As an entrepreneur, you want to fill a need in the marketplace. Unfortunately, many businesses are started solely to fulfill an entrepreneur’s ego (or, to put it less harshly, to satisfy one of the entrepreneur’s interests).

This can often be seen in the restaurant & bar industry, where too many entrepreneurs open shop because it’s a “cool” thing to do. Such businesses rarely succeed.

 

3) Life distractions

The best ideas don’t always come between 9 and 5. A person might have a great idea while driving, or in the shower, or while working out. It’s moments like these when an entrepreneur leaves behind the day-to-day tasks of running a business and gains a better perspective of the big picture.

Sadly, there are a lot of things that can disrupt a person’s home life. Illness, death of a family member, divorce, relationship trouble, and problems with a child are just a few of the many issues that can affect a person’s mindset. When things like this occur, moments of clarity are replaced by stress and anxiety.

Many entrepreneurial ventures depend heavily on new ideas and creative thinking, and when an entrepreneur’s head isn’t clear, business can suffer.

 

4) Bad feedback & white lies

People like spending time with friends and family.

Unfortunately, when it comes to business, friends and family members don’t always give the best advice. This is especially true at the birth of a business. Nobody wants to be a buzz-kill. No one wants to tell an entrepreneur their idea is bad, or their location stinks, or anything else negative. Most people are conditioned to be supportive of their friends and family regardless of the situation.

Plus, nobody wants to be wrong. Imagine your friend has an idea that you think is terrible. You share your objections, but the friend goes ahead with the idea anyways, and it succeeds. Now you’ll always be the naysayer that never believed in them. Nobody wants to be that person.

That’s why you’ll rarely get honest, objective business advice from friends or family members. And yet, oftentimes friends and family are the first people entrepreneurs turn to for advice.

 

5) Maybe the owner is just a jerk

There are a lot of great people in the business world, but there are also some jerks. And these jerks sometimes start their own companies.

A jerk, in this case, is someone who a lot of people can’t get along with. Maybe it’s because they’re a super-perfectionist, or they yell a lot, or they demand that everything be done in a certain way, or they constantly complain. Or maybe they’re annoying in some other way.

The key is that nobody -- not employees, customers, partners, suppliers, clients, etc. -- wants to give 100% for a jerk. Clients and customers will be turned off, and employees will start cutting corners. Most people believe that life is too short, and don’t want to spend their time working with someone they can’t get along with.

 

6) The entrepreneur never took the full leap

In most new business attempts, the entrepreneur never leaves their day job, or they create a back-up plan, or they have a job lined up in case the new business fails. In these cases, failure IS an option, as the entrepreneur has a safety net to fall back on. In cases where failure is NOT an option, and the entrepreneur depends on the new business to provide food, shelter and clothing, the business has a greater chance of succeeding.

There’s a great example of this concept in this NY Times article. Xiang Yu was a third century (B.C.) General in the Chinese army. He led his troops into enemy territory by crossing the Yangtze River. Then, in order to inspire his troops, Xiang Yu took some unorthodox measures. He burned all of his troop’s ships and destroyed all of their cooking materials. This left the troops with only two options: Move forward and conquer the enemy, or perish. The maneuver did not make Xiang Yu very popular with his soldiers; nevertheless, the troops advanced and ultimately emerged victorious.

Xiang Yu’s methods might be a little drastic in this day and age, but the moral of the story is what’s important. Author Anita Roddick has said that entrepreneurship is a matter of survival, and the truth is, if you’re not totally committed to your business, your chances for success will be greatly diminished.

 

---

About Growthink

Since 1999, Growthink's professional business plan writers have assisted more than 1,500 clients in launching and growing their businesses, and raising more than $1 billion in growth financing.

• Want to ensure that your business succeeds?
• Need help with your business plan? 
• Looking to raise venture capital?

 

Speak with a business plan consultant today!

 

This past week saw several interesting blog entries, articles, and reports from the world of entrepreneurship, management, and venture capital.

• John Tierney of the NY Times wrote an excellent article on opportunity costs and decision making, regarding research on the risks associated with keeping too many options on the table. An interesting observation from Professor Dan Ariely of MIT: “Closing a door on an option is experienced as a loss, and people are willing to pay a price to avoid the emotion of loss.”


• Chris Anderson wrote a fascinating article, The Rise of the “Free” Business Model. “Once a marketing gimmick, free has emerged as a full-fledged economy,” he writes, citing the success of Radiohead and Google as prime recent examples. Read the article here.


• Thanks to Jeff Cornwall for pointing us to the Angel Capital Association’s outlook for 2008. Despite recent news about the slowdown in the U.S. economy, nearly half of angel groups expect deal flow to improve in both quantity and quality in 2008. However, angel groups’ expectations for positive exits in 2008 were not as optimistic. More information about the Angel Capital Assocation’s report can be found here and here.


• Fred Wilson of Union Square Ventures wrote about the importance of conviction and discipline -- specifically, the importance of careful, deliberate planning in order to achieve conviction in one’s strategy, plus the necessary discipline to adhere to that strategy.


• He also provided great advice on choosing board members, including avoiding “big names” and making sure you get people who have enough time to commit to the job – it’s not a “retirement perk,” he says.


• imagine it! is a new documentary about Stanford students building companies solely from Post-It notes (available for download here, once you fill out the form). As Anthony Ha of VentureBeat wrote: “Watching the students at work is a great illustration of an important point: even if you’re facing substantial constraints, you can still produce something valuable.” (You can listen to him interview the executive producer of the film, Richard Tavener, here).


• Is there such a thing as a “born” entrepreneur? Scott Shane examines whether a person’s genetic makeup could affect their inclination to start a business.


• Michael McDerment of ThinkVitamin recently posted a great article with advice on How To Name Your Company. Evan Carmichael of YoungEntrepreneur.com also provided a few business naming tips of his own.


• Mashable introduced us to Fundability – a website that matches startups seeking seed capital with investors. While many websites also serve this general purpose, Fundability claims to match startups with investors’ preferences with an algorithm. Entrepreneurs looking to find investors can use the service for a $50 fee (though there is a 30-day free trial).


• Last week, Mashable also polled its readers, asking “What Would You Want to Invest in Online?” Mobile applications, social networking, and online advertising topped the list.


• Inc published The Nuts and Bolts of Entrepreneurship. A key insight from the article:
  “Real entrepreneurs grab an idea and start moving—and adapt their vision of the business as they go.”


• And finally – courtesy of VentureCyclist – we got a laugh from VCWear.com’s venture capitalist parody t-shirts.

Milton Hershey

Milton Hershey had a long path to the top of the chocolate industry. Hershey dropped out of school in the 4th grade and took an apprenticeship with a printer, only to be fired. He then became an apprentice to a candy-maker in Lancaster, PA. After studying the business for 4 years, Hershey started three unsuccessful candy companies in Philadelphia, Chicago and New York.

Hershey was not about to give up, so he moved back to Lancaster and began the Lancaster Caramel Company. His unique caramel recipe, which he had come across during his earlier travels, was a huge success. Hershey, who was always looking ahead, believed that chocolate products had a much greater future than caramel. He sold the Lancaster Caramel Company for $1 million in 1900 (nearly $25 million in 2008 dollars) and started the Hershey Company, which brought milk chocolate -- previously a Swiss delicacy -- to the masses.

Not only did Hershey overcome failure and accomplish his goals, but he also managed to do it close to home. Hershey created hundreds of jobs for Pennsylvanians. He also used some of his money to build houses, churches, and schools, cementing his status as a legend in the Keystone State.

Persistence is key. But it also helps if you have a solid business plan from the beginning. If you need assistance with your business plan, contact a Growthink business plan writer today.

 
Steve Jobs

You always hear about a “long road to the top,” but perseverance isn’t limited to the early stages of a person’s career. Oftentimes, failure can occur after a long period of success.

Steve Jobs achieved great success at a young age. When he was 20 years old, Jobs started Apple in his parents’ garage, and within a decade the company blossomed into a $2 billion empire. However, at age 30, Apple’s Board of Directors decided to take the business in a different direction, and Jobs was fired from the company he created. Jobs found himself unemployed, but treated it as a freedom rather than a curse. In fact, he later said that getting fired from Apple was the best thing to ever happen to him, because it allowed him to think more creatively and re-experience the joys of starting a company.

Jobs went on to found NeXT, a software company, and Pixar, the company that produces animated movies such as Finding Nemo. NeXT was subsequently purchased by Apple. Not only did Jobs go back to his former company, but he helped launch Apple’s current resurgence in popularity. Jobs claims that his career success and his strong relationship with his family are both results of his termination from Apple.

Are you building the next Pixar or Apple?  Get expert business planning advice from a Growthink business plan consultant.

Simon Cowell

Nowadays, Simon Cowell is a pop icon and a very wealthy man. But early in life, Cowell faced his fair share of struggles. At age 15, Cowell dropped out of school and bounced around jobs. He eventually landed a job in the mail room of EMI Music Publishing. Cowell worked his way up to the A&R department, and then went on to form his own publishing company, E&S Music.

Unfortunately, E&S folded in its first year. Cowell ended up with a lot of debt, and was forced to move back in with his parents. But he never gave up on his dream of working in the music industry, and eventually landed a job with a small company called Fanfare Records. He worked there for 8 years and helped the company become a very successful label. From there, Cowell spent years signing talent and working behind-the-scenes before launching the “American Idol” and “X-Factor” franchises that made him famous.

Even though he is rich and successful, Cowell continues to work on new projects. This kind of dedication no doubt helped him overcome his early roadblocks.

Thomas Edison

When he was a young boy, Thomas Edison’s parents pulled him out of school after teachers called him “stupid” and “unteachable.” Edison spent his teenage years working and being fired from various jobs, culminating in his termination from a telegraph company at age 21. Despite these setbacks, Edison never deterred from his true passion, inventing. Throughout his career, Edison obtained 1,093 patents. And while many of these inventions -- such as the light bulb, stock printer, phonograph and alkaline battery -- were groundbreaking, even more of them were unsuccessful. Edison is famous for saying that genius is “1% inspiration and 99% perspiration.”

One of Edison’s greatest stories of perseverance occurred after he was already wildly successful. After inventing the light bulb, Edison began a quest to find an inexpensive light bulb filament. At the time, ore was mined in the Midwest, and shipping costs were incredibly high. To combat this, Edison opened his own ore-mining plant in Ogdensburg, New Jersey. For roughly a decade, Edison devoted all his time and money to the plant. He also obtained 47 patents for inventions designed to make the plant run more smoothly. And after all of that, Edison’s project still failed thanks to the low quality ore on the East Coast.

But as it turned out, one of the aforementioned 47 inventions (a newly-designed crushing machine) revolutionized the cement industry and earned Edison back nearly all of the money he lost. In addition, Henry Ford would later credit Edison’s Ogdensburg project as the main inspiration for his Model T Ford assembly line, and many believe that Edison paved the way for modern-day industrial laboratories. Edison’s foray into ore-mining proves that dedication and commitment can pay off even in a losing venture.

 

Are you starting a new business?  Get expert strategic advice from Growthink's professional business plan consultants. 

 

George Steinbrenner

Before “The Boss” assumed ownership of the New York Yankees, he owned a basketball franchise called the Cleveland Pipers. The Pipers were part of the American Basketball League, and in 1960, under Steinbrenner’s helm, the franchise went bankrupt.

When he eventually took over the Yankees, Steinbrenner’s struggles didn’t end. Most baseball fans will remember the team’s drought in the 1980s and early 1990s. As the team suffered, Steinbrenner was often criticized for his executive decisions, which included questionable trades and frequent changes to the Manager position. Though his methods were controversial, Steinbrenner stuck to his guns, and it paid off. The Yankees made an impressive six World Series appearances from 1996-2003, and remain Major League Baseball’s most profitable team year after year.

Steinbrenner is known for his shrewd business tactics, but he’s also not afraid to put his money where his mouth is. The Yankees have the highest payroll in baseball, and they’ve been in contention every year since the mid-90s. Even when the Cleveland Pipers went bankrupt, Steinbrenner offered to pay back the team’s investors, a promise he eventually made good on.

Steinbrenner has been quoted as saying, "I never wanted anybody to say ‘I went down a path with George Steinbrenner and lost money.’"

J.K. Rowling

J.K. Rowling, author of the Harry Potter books, is currently the second-richest female entertainer on the planet, behind Oprah. However, when Rowling wrote the first Harry Potter book in 1995, it was rejected by twelve different publishers. Even Bloomsbury, the small publishing house that finally purchased Rowling’s manuscript, told the author to “get a day job.”

At the time when Rowling was writing the original Harry Potter book, her life was a self-described mess. She was going through a divorce and living in a tiny flat with her daughter. Rowling was surviving on government subsidies, and her mother had just passed away from multiple sclerosis. J.K. turned these negatives into a positive by devoting most of her free time to the Harry Potter series. She also drew from her bad personal experiences when writing. The result is a brand name currently worth nearly $15 billion.

 

What about you? Are you starting a new business?  If you need help with your business plan, contact Growthink's professional business plan writers. 

 

Walt Disney

As a young man, Walt Disney was fired from the Kansas City Star Newspaper because his boss thought he lacked creativity. He went on to form an animation company called Laugh-O-Gram Films in 1921. Using his natural salesmanship abilities, Disney was able to raise $15,000 for the company ($181,000 in 2008 dollars). However, he made a deal with a New York distributor, and when the distributor went out of business, Disney was forced to shut Laugh-O-Gram down. He could barely pay his rent and even resorted to eating dog food.

Broke but not defeated, Disney spent his last few dollars on a train ticket to Hollywood. Unfortunately his troubles were not over. In 1926, Disney created a cartoon character named Oswald the Rabbit. When he attempted to negotiate a better deal with Universal Studios -- the cartoon’s distributor -- Disney discovered that Universal had secretly patented the Oswald character. Universal then hired Disney’s artists away from him, and continued the cartoon without Disney’s input (and without paying him).

As if that wasn’t enough, Disney also struggled to release some of his now-classic films. He was told Mickey Mouse would fail because the mouse would “terrify women.” Distributors rejected The Three Little Pigs, saying it needed more characters. Pinocchio was shut down during production and Disney had to rewrite the entire storyline. Other films, like Bambi, Pollyanna and Fantasia, were misunderstood by audiences at the time of their release, only to become favorites later on.

Disney’s greatest example of perseverance occurred when he tried to make the book Mary Poppins into a film. In 1944, at the suggestion of his daughter, Disney decided to adapt the Pamela Travers novel into a screenplay. However, Travers had absolutely no interest in selling Mary Poppins to Hollywood. To win her over, Disney visited Travers at her England home repeatedly for the next 16 years. After more than a decade-and-a-half of persuasion, Travers was overcome by Disney’s charm and vision for the film, and finally gave him permission to bring Mary Poppins to the big screen. The result is a timeless classic.

In a fitting twist of fate, The Disney Company went on to purchase ABC in 1996. At the time, ABC was owner of the Kansas City Star, meaning the newspaper that once fired Disney had become part of the empire he created. And all thanks to his creativity (and a lot of perseverance).

 

Now, the one place where persistence is really required is in raising capital. If you successfully raise capital, you can build the business of your dreams. But without capital, you may never get your chance.  If you're raising capital from private investors, you can improve your chances of funding success with a professional private placement memorandum.  Call 877-478-4467 to speak with a Growthink consultant.